S&P rates Chester Downs loan B+

Standard & Poor's said it assigned a B+ rating with a recovery rating of 1 to Chester Downs & Marina LLC's incremental $40 million term loan. The 1 rating indicates a 90% to 100% expected recovery in a default.

All other outstanding ratings, including the B- corporate credit rating, remain unchanged.

The outlook is stable.

The company will use proceeds to repay an intercompany loan and for general corporate purposes.

The ratings reflect the aggressive financial policy and weak credit quality of the indirect majority owner and property manager, Harrah's Entertainment Inc., S&P said.

The agency said it believes that a bankruptcy at Harrah's could cause a bankruptcy at Chester Downs and Marina, despite its relatively moderate financial burden, the agency said.

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